Cross-Border Mergers and Acquisitions of Multinational Firms. New Firm-Level Evidence

Christian Arndt (christian.arndt@hfwu.de) and Anselm Mattes

No 62, IAW Discussion Papers from Institut für Angewandte Wirtschaftsforschung (IAW)

Abstract: FDI is an important channel for productivity spillovers across economies. But productivity and employment effects of cross-border mergers and acquisitions (M&A) on multinational firms are rather unclear and much disputed. We empirically analyze the effects of cross-border M&A on the performance of multinationals in Germany using new data on the firm-level. In order to control for possible selection biases we use a propensity score matching approach. We find that, first, foreign-owned multinationals are smaller but more productive than their domestic counterparts in the mean. But controlling for differences in the industrial composition and firm size, foreign-owned multinationals are larger in terms of capital, sales, and value added. The difference of total factor productivity amounts to 6 %. Second, multinationals show quite heterogeneous performances after cross-border M&A. Third, we do not find an average causal effect of cross-border M&A on the employment of the acquired multinational firm. But most importantly, the causal effect of cross-border M&A on the multinationals’ productivity is positive and significant.

Keywords: FDI; Spillover; foreign ownership; cross-border M&A; productivity; employment effects (search for similar items in EconPapers)
JEL-codes: F21 F23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2010-06
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.iaw.edu/RePEc/iaw/pdf/iaw_dp_62.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iaw:iawdip:62

Access Statistics for this paper

More papers in IAW Discussion Papers from Institut für Angewandte Wirtschaftsforschung (IAW) Contact information at EDIRC.
Bibliographic data for series maintained by Rolf Kleimann (iaw@iaw.edu).